Tuesday, September 30, 2008

I quoted Garrison Keillor recently on the tragedies of inattention in a powerful vehicle. A train driver caused a lot of harm in Los Angeles, but far more people bicyclist and pedestrians die each year because of a moment's inattention.

I thank Chance every day that, so far, I've never harmed anyone while driving. A few days ago an inattentive driver in his 30s (was he talking on the phone?) killed a bicyclist on nearby popular riding street. If he's a decent human being his error will haunt him for the rest of his life. I know it would devastate me.

Rodney Scroggins was riding his bicycle to work when he was hit by a motorist....

... Jimmy Nisser, 65, of St. Louis Park, was killed when he was struck by a vehicle Sept. 11 while riding on Excelsior Blvd. near 32nd Street...

... there have been 47 hit and run accidents involving bicycles and motor vehicles in Minneapolis this year. Police are still looking for the drivers who hit Nisser and Scroggins....

So about once a week there's a significant, reported, hit and run car-bike "accident" in a modest metro area. Across the nation there must be at least one an hour. I suspect most are never solved.

The only fixes I can see are more sophisticated automotive sensors. Standard proximity radar, IR sensors, visible light sensors -- at tracking people, bicycles and motorbikes -- sensors that track direction and motion and anticipate impact, slowing a car, triggering the car horn to warn both driver and pedestrian of pending impact, alerting the driver with sound and light.

The least intrusive aides would be active windshields that use sensor data to enhance images corresponding to pedestrians and bicycles. The bicyclist dimly seen out of the corner of one's eye is now a bright spot on the windshield surrounded by a 8 foot diameter circle.

Finally, sensors that detect an impact and then send the last available imaging along with the vehicle ID directly to the police. Then, when an accident is reported, finding the killer is a trivial task.

We have the technology to do all of this. We've invested a lot of money to make the inside of the car safer. Now's the time to require technologies to make the outside of the car safer too.

I read Krugman, but even without his help I think it was obvious we were in a real estate bubble at least 4-5 years ago. When we moved 2 years ago we expected we'd lose money in the near term; we'd sold high but bought higher.

... Mr. Davidson said that the idiosyncrasy of the instruments, combined with the overlay of technology, allowed the traders to live in denial. They would sit at terminals and use data — historical data that had been gathered before they started giving out money to people with no ability to pay — and decide that the risks were manageable. All of it was unreal, ineffable, tough to know. Except the way it turned out, as Mr. Davidson notes near the end of the story.

“It’s as if the global pool of money thought it was putting trillions of dollars in a savings account, but really, half of it was going into a furnace. The monI didn't figure the entire financial system would collapse, and take our investments down as well. I thought things would be a bit more contained.ey is gone, burned up, never to come back.”

Was the money really destroyed? If you sold a house at the peak, then bought a smaller home and put the difference in a money market fund, didn't you come out ahead?

On the other hand a huge number of homes were built in some parts of the country that will never recover their costs. The physical stock is deteriorating, and they may be bulldozed. Even there, though, the workers spent the money they got. The real losers were the trees, and the opportunity cost of wasted work.

My hobbyist understanding of the economics is that what we end up with is largely a huge transfer of money. We talk about the losers now, but someone is profiting somewhere. So the money will still slosh around somewhere, still looking for the next bubble.

On the other hand, while we expected a near term painful drop in our home value, we didn't expect an equivalent drop in our investment value. We hoped for a softer landing, but we didn't realize how big the Ponzi scheme had become. We didn't realize how vulnerable banks really were; they didn't exactly vaporize in the bubble of 2000. We thought the lessons of Great Depression I and the crises of Japan and Sweden were well understood.

So did those TV shows predict the collapse of the banking sector, or did they miss that too?

Calculated Risk, in a discussion of home price declines, links to my three-year-old analysis, That Hissing Sound...

... if you google the article, high on the list you find this delightful screed from Powerline, which says that I was just looking for something to complain about amidst the Bush Boom, and concludes:

"[T]here is little reason to fear a catastrophic collapse in home prices.

Krugman will have to come up with something much better, I think, to cause many others to share his pessimism."

A cold dish for Powerline.

Update: Re-reading the article, I recognized it immediately. It's good, but Krugman basically says the bubble is on the coasts, not in "flatland". By which he meant, say, Minnesota. It's true we haven't lost 70% of the value of our home, but last I looked we were down at least 20% from the peak (I don't look too often). So, if anything, he understated the problem. He also didn't imagine that the entire finance sector was going to implode.

It happens to the balance sheet that is keeping America up at night, which makes it all the more memorable. Beyond that, it's a nice reference for non-MBAs who still need to understand the base concepts.

The key takeaway is the difference between liabilities owed to shareholders and to bondholders. Shareholders are a key buffer in a publicly traded company. You can wipe them out and the company can go on. Bondholders can't be wiped out except through bankruptcy; at which point they and customers fight for the scraps.

The original Paulson plan (not the improved but rejected revised plan) might have worked if there was still some Shareholder equity left -- but once they're toast the corporation is dead and the money probably goes to the bondholders.

… Some economists believe that doing nothing could result in another Great Depression, but is that such a bad thing? There is a reason it was called the Great Depression and not, say, the Terrible Depression. According to economist J. Bradford Delong, members of the Hoover Administration, influenced by the theories of Austrian economists like Friedrich von Hayek and Joesph Schumpeter, believed “that in the long run the Great Depression would turn out to have been ‘good medicine’ for the economy.” Unfortunately, Hoover was swept out of office before this theory could be tested and Franklin Roosevelt enacted all kinds of socialistic policies that bedevil us to this day. So perhaps the best thing we could do is do nothing and bring on another Great Depression, but let’s do it right this time. Sure, there would be some temporary pain, and some people might be forced to wait in bread lines and sell apples in the street, but in the long run it would be better for our economy to shake out the weak links. Some Republicans might be reluctant to come out in support of triggering a new Great Depression in an election year so John McCain is going to have to show some leadership, the kind of leadership he showed in scuttling the first bill, to bring Republicans in Congress around. Coming out in favor of a Great Depression would show voters that John McCain really is a new kind of leader and it might just be the Hail Mary pass that wins him the election.

...House Republicans led the way and will get most of the blame. It has been interesting to watch them on their single-minded mission to destroy the Republican Party.

When the mouthpiece of the party establishment writes this, something is afoot.

Something potentially positive.

We need a healthy GOP. We need a party that represents business, that represents people who dislike change, and that represents the wealthy. If wealthy people don't get "extra votes", they'll destroy democracy (the flip side of the fear that the poor will vote themselves endless benefits -- both have a point).

We need a party that represents "traditional values" -- like integrity, honest accounting, accountability, contracts, and military ethos -- including responsibility to enemy combatants.

Clearly today's GOP does none of these. They don't even represent the long term interests of the wealthy, because they're destroying the foundations of future security and wealth.

Could there be a group of internal GOP reformers who, at this point, want the party to crash and burn? They may know that only a devastating loss will build the foundations for political recovery and renaissance.

If that group exists, it will be interesting to see if Brooks begins to channel their agenda.

During the decade I've been CIO, IT operating budgets have been 2% of my organization's total budget, which is typical for the healthcare industry.

During the same period, IT budgets for the financial services industry have averaged 10% or higher.

Since 1998, I've often been told that Healthcare IT needs to take a lesson from the financial folks about doing IT right...

... Given the recent challenges of Lehman, Merrill, AIG, Washington Mutual, and others, you wonder just how effective the IT systems of these companies have been.

Of course they had great transactional systems, disaster recovery, infrastructure, and data warehouses.

However, did they have the business intelligence tools and dashboards that could alerted decision makers about the looming collapse of the industry?

Did the financial services industry have controls, risk analysis, or a memory of previous crisis - the Depression, the Japanese banking crisis, Enron/Worldcom? Was it greed, irrational expectations or too much data and not enough information that brought down these great institutions?

I'm sure many books will be written about the causes and those who are to blame.

One thing is for certain, In 2008, no one is going to tell me that healthcare IT should run as well as Lehman Brothers. I've even talked to folks in the industry who are rewriting their websites and resumes to remove historical references to their overwhelming historical successes in financial services IT..

Everyone thinks their professional domain has the greatest IT challenges.

In my case, I know that's true. [1]

[1] The hardest thing about Healthcare IT? It's embedded in a strange fusion of a market economy, soviet style central planning, and the antimatter triangle of provider, consumer and payor.

...There's a lot of talk out there from commentators who you'd think would know better claiming that this was basically a bipartisan failure -- that both parties, Republicans and Democrats, failed to carry their members for this bill.

But look at the numbers. 60% of Democrats in the House voted for this bill. 33% of Republicans. Face it, that's not even close...

The GOP killed the bill. That isn't making their business donors very happy. In fact I'd wager their donors are livid today ...

Not surprisingly the story was suppressed by the Chinese federal government lest the bad news tarnish the Olympic glow.

In the old days we'd feel a bit of pride about our superior government, but those days are gone. The Bush administration does the same sort of thing. Back to The Jungle reviews a book written after the pet food poisoning last year. The Bush-devastated FDA earns plenty of scorn.

I suspect, because it's only human, that many Chinese citizens thought Americans were making an unseemly fuss about dog food problems. I know several American right wingnuts expressed similar feelings early in the story.

53,000 children. This could have been avoided.

It will happen here if we don't get the GOP out of power.

In the meantime, I think we'll reduce the powdered milk that goes into my son's "peanut butter snack".

Update 9/30/08: Great NYT Editorial on the 1858 New York "swill milk" fraud by Bee Wilson, author of “Swindled: The Dark History of Food Fraud From Poisoned Candy to Counterfeit Coffee." Same framework, same horrors. I don't even want to bother thinking about how libertarians answer these things.

Sunday, September 28, 2008

... The research found that statins appear to increase levels of a protein called NBS-1, which is involved in the repair of DNA within cells. This means they may be able to hold off the effects of old age in the artery wall for a little longer.

Professor Martin Bennett, who led the research, said: 'It's an exciting breakthrough to find that statins not only lower cholesterol but also rev up the cells' own DNA repair kit, slowing the ageing process of the diseased artery.

'If statins can do this to other cells, they may protect normal tissues from DNA damage that occurs as part of chemotherapy and radiotherapy for cancer, potentially reducing the side-effects.'...

Whenever you read of a new benefit of an old drug, you also have to think of the other side of the coin. Researchers didn't think of Statins as anti-aging drugs, so they wouldn't have looked for dark side of that class of drug ....

... Inside John McCain s campaign the expectation is growing that there will be a popularity boosting pre-election wedding in Alaska between Bristol Palin, 17, and Levi Johnston, 18, her schoolmate and father of her baby. It would be fantastic, said a McCain insider. You would have every TV camera there. The entire country would be watching. It would shut down the race for a week...

... Yet even as he huffed and puffed about being a “leader,” McCain took no action and felt no urgency. As his Congressional colleagues worked tirelessly in Washington, he malingered in New York. He checked out the suffering on Main Street (or perhaps High Street) by conferring with Lady Lynn Forester de Rothschild, the Hillary-turned-McCain supporter best known for her fabulous London digs and her diatribes against Obama’s elitism. McCain also found time to have a well-publicized chat with one of those celebrities he so disdains, Bono, and to give a self-promoting public speech at the Clinton Global Initiative.

There was no suspension of his campaign. His surrogates and ads remained on television. Huffington Post bloggers, working the phones, couldn’t find a single McCain campaign office that had gone on hiatus. This “suspension” ruse was an exact replay of McCain’s self-righteous “suspension” of the G.O.P. convention as Hurricane Gustav arrived on Labor Day. “We will put aside our political hats and put on our American hats,” he declared then, solemnly pledging that conventioneers would help those in need. But as anyone in the Twin Cities could see, the assembled put on their party hats instead, piling into the lobbyists’ bacchanals earlier than scheduled, albeit on the down-low...

...If Democrats believe the only plan that will save the economy is the Paulson plan, they have the power and the moral responsibility to go ahead and pass it,” said Mr. Hensarling. “They don’t have to have Republican votes to get it done...

We've seen this game before. It usually involves a financial crisis of one sort or another.

In past episodes the grown-ups turn the car aside. The crisis is averted. The GOP then savages the grown-ups.

That would be fine, except for what happens next.

It works. The GOP win, and once they win they create more crises. For the grown-ups to solve. In the long run, being grown-up only makes things worse.

Being grown-up doesn't work when a large chunk of the electorate is clueless.

Better to crash and burn now, because if the GOP isn't reformed we'll only crash harder next time. The GOP needs to spend four years in the desert, purging the torturers and the loons, and rebuilding as a respectable alternative.

...Although it was not widely known, Goldman, a Wall Street stalwart that had seemed immune to its rivals’ woes, was A.I.G.’s largest trading partner, according to six people close to the insurer who requested anonymity because of confidentiality agreements. A collapse of the insurer threatened to leave a hole of as much as $20 billion in Goldman’s side, several of these people said.

Days later, federal officials, who had let Lehman die and initially balked at tossing a lifeline to A.I.G., ended up bailing out the insurer for $85 billion.

Their message was simple: Lehman was expendable. But if A.I.G. unspooled, so could some of the mightiest enterprises in the world...

... Although America’s housing collapse is often cited as having caused the crisis, the system was vulnerable because of intricate financial contracts known as credit derivatives, which insure debt holders against default. They are fashioned privately and beyond the ken of regulators — sometimes even beyond the understanding of executives peddling them.

Originally intended to diminish risk and spread prosperity, these inventions instead magnified the impact of bad mortgages like the ones that felled Bear Stearns and Lehman and now threaten the entire economy.

In the case of A.I.G., the virus exploded from a freewheeling little 377-person unit in London, and flourished in a climate of opulent pay, lax oversight and blind faith in financial risk models. It nearly decimated one of the world’s most admired companies, a seemingly sturdy insurer with a trillion-dollar balance sheet, 116,000 employees and operations in 130 countries.

“It is beyond shocking that this small operation could blow up the holding company,” said Robert Arvanitis, chief executive of Risk Finance Advisors in Westport, Conn. “They found a quick way to make a fast buck on derivatives based on A.I.G.’s solid credit rating and strong balance sheet. But it all got out of control...

Slashdot: News for nerds, stuff that matters: "'So, you thought you did well to support the fledgling music industry by purchasing your tracks legally from the Wal-Mart store? Well, forget about moving these tracks to a new PC! Since they started selling DRM-free tracks last year, there's no money to be made in maintaining the DRM support systems, and in fact, support is being shut down. Make sure you circumvent the restrictions by burning the tracks to an old-fashioned CD before Wal-mart 'will no longer be able to assist with digital rights management issues for protected WMA files purchased from Walmart.com.' Support ends October 9th.'"

This is at least the 3-4th time a DRMd music vendor has shutdown and taken their customer's music with them.

The interesting aspect is that consumers don't seem to worry about DRM at all.

Why is that? Here are my guesses:

Tyranny of the mean: people just can't get their heads around this stuff.

Just too complicated: people have to much complexity going on to even think about it.

All of the above, of course, but 7-9 are important. People who like music either buy CDs and convert, or they steal it outright. I also think that younger consumers expect transience, they live in an ethereal world.

Every time some vendor turns off their DRMd music they make stealing music more respectable, and make buying music look foolish.

Apple Inc. has begun selling unlocked iPhones in Hong Kong that can be used with any cell phone carrier.

The move appears to depart from the company's previous strategy of selling the popular device capable of working with 3G, or third-generation cellular networks, through specific service providers, usually with a required service contract.

On its Hong Kong Web site, the Cupertino, California-based company is advertising unlocked iPhones, saying people can 'buy directly from Apple' and choose their own carrier.

'iPhone 3G purchased at the Apple Online Store can be activated with any wireless carrier,' the Web site says...

These phones, of course, are for the mainland market.

It's quite a bold move. I'm sure Apple thought very long and hard about when and how to do it.

Yes, the current GOP meme is to blame our latest financial crisis on all those poor people who've recently lost their homes, and to blame that on Clinton. Not Hillary. Bill. Oh, and welfare queens. Black people, mostly.

Black people stealing the millions off the table of deserving billionaires. Lucky Ducky lives.

The GOP has effectively held power for 12 years, though for the past year they've been greatly slowed. Twenty years from now, they'll blame rising sea levels and severe weather on Bill Clinton, unless civilization wins this November.

In which case Obama will be blamed for the weather.

There is an upside. This stuff is so silly that it might, just maybe, just possibly, strike a few people as being laughable.

... One thing we now know for sure. Electing John McCain would be God’s gift to the profession of journalism. A story a minute.

Imagine what would happen if a new beetle infested the Iowa corn crop during the first year of a McCain administration. On Monday, we spray. On Tuesday, we firebomb. On Wednesday, the president marches barefoot through the prairie in a show of support for Iowa farmers. On Thursday, the White House reveals that Wiley Flum, a postal worker from Willimantic, Conn., has been named the new beetle eradication czar. McCain says that Flum had shown “the instincts of a maverick reformer” in personally buying a box of roach motels and scattering them around the post office locker room. “I can’t wait to introduce Wiley to those beetles in Iowa,” the president adds.

These right wing commentators say aloud what their audience is thinking. Since "ethnic" is a dog whistle code word for "alien, black, Muslim*, scary, other" Matthews is effectively saying

Obama wasn't scary.

Matthews, a loyal GOP tribesman, has been telling his people Obama is scary. Now Matthew's people see that Obama isn't scary. Matthews is worried.

I sometimes read editorials that Obama needs to stop being cool, he needs to be passionate, angry, whatever.

Riiiiigggghhhht. Hate to break this to anyone, but Obama is, you know ... melanin positive. I trust he understands, by now, how to work the fear factor.

Obama did well at this debate. I still think McCain will be President, but Obama merits the money we give him. Time to send more.

*Update: I am an agnostic heathen who suspects that if any supernatural entities currently exist that they are unlikely to be friends to humanity. Obama is a more conventional Christian than McCain. I realized after writing this post that in the current bizarro world of American politics I needed to point this out.

The date is 1 September 1983 and the Cold War between the Soviet Union and USA is in full gear, when from the New York skies Korean Air Lines Flight 007 flies from JFK, destination Seoul, South Korea.

In the middle of the flight, while accidentally passing through Soviet air space, Soviet fighter jets appear getting close the aircraft. ..

... The Soviet fighter jets shot down the plane, with the aircraft plunging 35,000 feet in less than 90 seconds, killing 269 civilians, including a US congressman.

The tension between the two mega-powers hit an all-time high, and on 15 September 1983 the US administration banned Soviet aircrafts from operating in US airspace. With the political climate in dangerous territory, both US and Soviet government were on high-alert believing an attack was imminent.

It was a cold night at the Serpukhov-15 bunker in Moscow on 26 September 1983 as Strategic Rocket Forces lieutenant colonel Stanislav Yevgrafovich Petrov resumed his duty, monitoring the skies of the Soviet Union, after taking a shift of someone else who couldn't go to work.

Just past midnight, Petrov received a computer report he'd dreaded all his military career to see, the computer captured a nuclear military missile being launched from the US, destination Moscow....

Petrov figured something didn't make sense, as strategically, just one missile...

But then, seconds later, the situation turned extremely serious. A second missile was spotted by the satellite. The pressure by the officers in the bunker to commence responsive actions against America started growing. A third missile was spotted, followed by a fourth. A couple of seconds later, a fifth one was spotted... everyone in the bunker was agitated as the USSR was under missile attack.

He had two options. Go with his instinct and dismiss the missiles as computer errors, breaking military protocol in the process or take responsive action and commence full-blown nuclear actions against America, potentially killing millions.

He decided it was a computer error, knowing deep down that if he was wrong, missiles would be raining down in Moscow in minutes.

Seconds turned to minutes, and as time passed it was clear Petrov was right, it was a computer error after all. Stanislav Petrov had prevented a worldwide nuclear war, a doomsday scenario that would have annihilated entire cities. He was a hero. Those around him congratulated him for his superb judgment.

Upon further investigation it resulted that the error came from a very rare sunlight alignment, which the computer read as missile.

Of course, top brass in the Kremlin didn't find it so heroic, as he broke military protocol and if he would have been wrong, risked millions of Russian lives. He was sent into early retirement, with a measly $200 a month pension, suffering a nervous breakdown in the process...

...In 2008, a documentary film entitled 'The Man who saved the World' is set to be released, perhaps giving Petrov some financial help, thanking him for the incredible part he had in keeping the US and the USSR out of a full-blown war....

I'd heard a bit of this story before, but not with this much detail. Of course he didn't only save American lives. The Soviet system could not wipe out the US arsenal, Trident submarines would have destroyed much of the USSR.

There have been other, similar, close calls. I recall reading of 4-5 that have been made public, I assume there are another 5-10 that are still secret.

So why are we still here? How can we keep getting lucky? It's enough to make one wonder about bizarre variants of the anthropic principle, or wonder if the game is rigg.... [abort, retry, fail].

It featured Chris Farrell, who usually represents my team -- the rational left. The odd bit was the other guest, Louis Johnston. I suppose he was there to represent the right -- but he was rational too.

A discussion between two rationalists is probably a bit bland for the masses, though I much appreciate it.

Early in the program, there were some interesting themes. Chris spoke of systemic failure and of regulatory failure, and in another context both spoke of firewalls and hurricanes.

That suggests, as they probably intended, that even if there are deeper economic and cultural failures, there are also more straightforward firewall failures in our current crisis. These are usually called "regulatory failures" but regulation can come in many forms. I think the most interesting forms are those that are designed to stop the spread of contagions.

Fires, seizures, epidemics, hurricanes and financial crises are all, famously, "chaotic". They have non-linear perturbation sensitivities, and they can roar up and die down in ways that are only loosely predictable.

Excepting hurricanes, we have firewalls for these things. In our brains are systems to dampen seizures should they arise, and, we think, to limit where they spread. In our buildings we have, well, firewalls. In public health we find immunization rings, targeted interventions, quarantine and the like.

Firewalls are probably a fundamental requirement for all systems sufficiently complex to be interesting (insert Godel reference of choice). I think even the GOP House would agree things are interesting now.

Firewalls don't show up, to my knowledge, in classical economics. I'm sure they show up in modern economic models of regulation and in studies of "complex adaptive systems" [1]. Maybe this latest crisis will bring models of financial system firewalls, like the mourned Glass-Steagall act, to the level of popular economics.

Brad, over to you ...

[1] Unfortunately in English we use the same word for computer network security tools as for the broader concept of things that prevent spread. So a search involving the word "firewall" doesn't work too well. Interestingly the "same" search would work much better in a language with different homographs.

It's odd, as a Minnesotan, that I didn't realize Keillor has a Trib column. There's no feed, but I'll use one of several page monitoring services to create one. A special thanks to the commenter who pointed me to Garrison's latest column. I'll split my response into two parts

It's just human nature that some calamities register in the brain and others don't. The train engineer texting at the throttle ("HOW R U? C U L8R") and missing the red light and 25 people die in the crash—oh, God, that is way too real—everyone has had a moment of supreme stupidity that came close to killing somebody. Even atheists say a little prayer now and then: Dear God, I am an idiot, thank you for protecting my children.

So true. Two days ago a driver almost ran me down as I crossed a shopping mall exit. She drove straight ahead, maybe 200 yards, and I still didn't register in her central vision. She was looking right, and probably talking on the phone.

I'd have jumped on her very slowly moving hood, so I wouldn't have been badly hurt, but those things happen all the time. I've done lesser versions myself. For every person who backs over their child playing in the driveway, a hundred fall to their knees with a near miss.

The train driver shouldn't have been texting, but it's insane that the system relied on someone noticing a red light. That was reasonable in 1940.

Keillor continues ...

... On the other hand, the federal bailout of the financial market (YAWN) is a calamity that people accept as if it were just one more hurricane. An air of crisis, the secretary of the Treasury striding down a hall at the Capitol with minions in his wake, solemn-faced congressmen at the microphones. Something must be done, harrumph harrumph. The Current Occupant pops out of the cuckoo clock and reads a few lines off a piece of paper, pronouncing all the words correctly. And the newscaster looks into the camera and says, "Etaoin shrdlu qwertyuiop." Where is the outrage?...

... Confident men took leave of common sense and bet on the idea of perpetual profit in the real estate market and crashed. But it wasn't their money. It was your money they were messing with. And that's why you need government regulators. Gimlet-eyed men with steel-rim glasses and crepe-soled shoes who check the numbers and have the power to say, "This is a scam and a hustle and either you cease and desist or you spend a few years in a minimum-security federal facility playing backgammon."

The Republican Party used to specialize in gimlet-eyed, steel-rim, crepe-soled common sense, and then it was taken over by crooked preachers who demand we trust them because they're packing a Bible and God sent them on a mission to enact lower taxes, less government. Except when things crash, and then government has to pick up the pieces.

... What we are seeing is the stuff of a novel, the public corruption of an American war hero. It is painful. First, there was his exploitation of a symbolic woman, an eager zealot who is so far out of her depth that it isn't funny anymore. Anyone with a heart has to hurt for how McCain has made a fool of her.

McCain seems willing to say anything, do anything, to get to the White House so he can go to war with Iran. If he needs to recline naked in Macy's window, he would do that, or eat live chickens or claim to be a reformer. Obviously you can fool a lot of people for a while, and maybe he can stretch it out until mid-November. But the truth is marching on...

Government regulators are corruptible too; we've seen plenty of that in the past 8 years. The sex and drugs dept of the interior scandal shows how government can be broken. We need a mix of market oversight and regulation; the Clinton years show us how the balance can work.

We need something else though, and that's much harder.

Every cop knows that civil peace doesn't come from the police. The police are an essential component, but most of all you need a civil society, a culture of accommodation, tolerance, respect for law and for people, and a culture where duty and honesty earn respect. A culture where wealth without honor earns scorn and liars are scum.

We've drifted from that culture. Rove and the GOP led the descent in the 2nd Clinton term, but they couldn't have done it alone.

We don't know how cultures form or shift -- we still can't do the "social engineering" I contemplated 30 years ago. We suspect it comes, in part, from the top. If McCain/Palin are elected, and I still think they will be, we'll be cementing a culture of deceit. If Obama/Biden win, and I think that will take a bleedin' miracle, maybe we can start a turnaround.

Lastly, I don't remember when the "Republican Party used to specialize in gimlet-eyed, steel-rim, crepe-soled common sense". I think that was probably before Nixon - Gerald Ford was perhaps the last of that breed. A little bit before my time. We need that conservative party very badly.

Unfortunately only a devastating electoral defeat will lead the GOP to reform and return as a healthy alternative -- and I don't see that happening.

I wish the truth were marching on, but I sure don't see it. Maybe in China.

... In large part because the market thinks banks and other financial institutions are way risky, they are. There is a self-fulfilling prophecy element here. No bank or other financial institution can survive for more than a month or two when market risk is at current levels. Banks borrow a lot of money. They lend out a lot of money at a slightly higher interest rate. They make their profits on volume -- on the amount of money borrowed and loaned. Most of their loans are long-term: Their terms don't change when market conditions change. Most of their borrowings are short-term: Their terms do change when market conditions change. The high level of market risk and its rapid run-up from normal levels only a year ago last August means death to all banks, and near-banks, and shadow-banks, and banklike institutions -- unless the economic fever is broken and is broken soon....

... Or, as Sarah Palin told Katie Couric on CBS News last night: “Not necessarily this, as it’s been proposed, has to pass or we’re gonna find ourselves in another Great Depression. But there has to be action taken, bipartisan effort — Congress not pointing fingers at this point at ... one another, but finding the solution to this, taking action and being serious about the reforms on Wall Street that are needed.”

So say we all.

(Palin was unable to answer questions about McCain’s record and relief for homeowners with troubled mortgages. But she did reveal forthrightly that she considers her running mate a “maverick.”)...

Update 9/25/08: M saw the interview and the transcript. She now understands why John McWreck had to cancel on Letterman, cancel the debates, and fly off to Washington to destroy the American economy. Anything to make people forget the interview.

The comments, by the way, are priceless. My fave: "Just who in the name of atheism is this person?"

Putting the jigsaw pieces together, you get a remarkably ugly picture:

* Old guy with 1-3 years to live * Charismatic Evita Peron figure fronting for Karl Rove and the old gang, ready to step into his boots * Battle-hardened infantry units (recruited from politically conservative areas, natch) being moved into position in the homeland * Opposition members being harassed, bugged, arrested, beaten — before the junta steps in * A gathering fiscal crisis which will leave a lot of very angry people looking for scapegoats to blame

I really hope I'm putting these pieces together in the wrong order and it all falls apart on November 5th. But I'm not betting that way.

Even there isn’t really a Cheney scheme to take over on 11/5/08 (who knows what he has to hide?) American democracy is now an accident waiting to happen. By dissolving the constitutional rules that keep government healthy, Bush has made freedom a pushover. It wouldn’t take too much to wrap the whole thing up.

BTW Charlie, I believe Posse Comitatus was suspended a few years ago.

(Sorry, I can’t help it if the past 8 years have made the once insanely preposterous seem almost plausible.)

The most important philosopher ever to write in English, David Hume (1711-1776) — the last of the great triumvirate of “British empiricists” — was also well-known in his own time as an historian and essayist. A master stylist in any genre, Hume's major philosophical works — A Treatise of Human Nature (1739-1740), the Enquiries concerning Human Understanding (1748) and concerning the Principles of Morals (1751), as well as the posthumously published Dialogues concerning Natural Religion (1779) — remain widely and deeply influential. Although many of Hume's contemporaries denounced his writings as works of scepticism and atheism, his influence is evident in the moral philosophy and economic writings of his close friend Adam Smith. Hume also awakened Immanuel Kant from his “dogmatic slumbers” and “caused the scales to fall” from Jeremy Bentham's eyes. Charles Darwin counted Hume as a central influence, as did “Darwin's bulldog,” Thomas Henry Huxley. The diverse directions in which these writers took what they gleaned from reading Hume reflect not only the richness of their sources but also the wide range of his empiricism. Today, philosophers recognize Hume as a precursor of contemporary cognitive science, as well as one of the most thoroughgoing exponents of philosophical naturalism….

…Born in Edinburgh, Hume spent his childhood at Ninewells, the family's modest estate on the Whitadder River in the border lowlands near Berwick. His father died just after David's second birthday, “leaving me, with an elder brother and a sister under the care of our Mother, a woman of singular Merit, who, though young and handsome, devoted herself to the rearing and educating of her Children.” (All quotations in this section are from Hume's autobiographical essay, “My Own life”, reprinted in HL.)

From what I can gather he was probably also the first modern psychologist and the first cultural anthropologist.

Of course he’s not a perfect modernist. His opinions on IQ and race are pretty much in line with his times (and today’s Bell Curve gang). So he’s only 200 years ahead of his time.

Wednesday, September 24, 2008

.... I have a friend of 20 years who is in a key technical role at a very large company. He's too vital to the company to risk losing but too geeky to fit in. He's on the craft (non-management) salary scale, but way higher than he ought to be for having no direct responsibility. All he does, in fact, is from time to time save his company from ruin. And even more rarely, he saves all the rest of us from ruin, too, in ways I am not at liberty to explain. How do you manage such a guy? Where he works they have him report to the CEO. The Big Guy has 5-6 direct reports and one of them -- my friend -- doesn't manage anyone or anything....

In most publicly traded corporations (PTC) rewards increase in proportion to the budget and team a person manages. PTCs can have a hard time dealing with oddballs who may be quite appreciated, but who don't fit the structure.

I think most of these people do best starting companies or joining small companies, but the latter are rare and the former is rather a lot of work - to the exclusion of other duties. Sometimes PTCs find a way to fit 'em in.

A few hundred billion in bank losses typically means a few hundred billion in someone else's pocket. Winners and losers, money sloshing about, but, really, it need not impact the real world all that much. Not like a massive earthquake in, say San Francisco. There you'd be talking about hundreds of billions of dollars of real losses.

Where things meet the real world is when the financial system is so disrupted it can't fulfill it's essential functions including setting prices, assigning risks, and moving money around:

... So why should we all be worried? Well, for one thing, if banks start failing, and credit markets freeze up, then any business that depends on rolling over short-term debt to fund daily activities is in danger. Remember Enron? Enron imploded in a matter of days because its lenders suddenly refused to roll over its short-term debt. But it's not just Wall Street investment banks and out-of-control Houston energy companies that depend on debt markets -- a vast number of large corporations engage in the same practices. And if a significant percentage of large corporations can no longer borrow money the implications for the 'real economy' will be substantial. Higher unemployment, slower or negative economic growth, etc...

Nice summary from HTWW. Unfortunately, with Bush/Cheney in power, we can't trust the executive branch to get things right. We've got to rely on the Democrat majority in the Senate to work out the best compromise ...

Why would McCain duck a debate he was expected to do well at? He's been a better debater than Obama, and all he has to do is put on a reasonable show to win.

Maybe he wants to exert his will on the bailout bill. There's a good chance he'll be president -- he should have real influence within his party. Maybe he has donors he has to take care of.

Or maybe his Rovian advisors calculate political theater will get more votes than the debate. They could be right, they know their base much better than I do.

Or maybe McCain is not ready to be seen in a debate setting.

I've noted a few times that McCain is at risk, by virtue of age, smoking history and head injuries (Vietnam), of a dementing disorder. His erratic behavior over the past month makes that even more probable.

Cognitive disability in the aged often arises from a combination of the Alzheimer's process and vascular disease, including frequent small strokes. If he's experienced an abrupt drop in his cognition, I'd wonder about a small stroke or "micro-infarct". Typically symptoms will improve over days to a week, but usually not back to the previous status.

...listen to his speech, and look at his left eye. I'm no expert, and this is pure speculation only, but could the real reason McCain has suspended his campaign be because he has suffered a small stroke?

If McCain's health is failing the trip to Washington may also involve finding someone to stand in for him.

... let’s talk about how governments normally respond to financial crisis: namely, they rescue the failing financial institutions, taking temporary ownership while keeping them running. If they don’t want to keep the institutions public, they eventually dispose of bad assets and pay off enough debt to make the institutions viable again, then sell them back to the private sector. But the first step is rescue with ownership.

That’s what we did in the S&L crisis; that’s what Sweden did in the early 90s; that’s what was just done with Fannie and Freddie; it’s even what was done just last week with AIG. It’s more or less what would happen with the Dodd plan, which would buy bad debt but get equity warrants that depend on the later losses on that debt.

But now Paulson and Bernanke are proposing, very nearly, to do the opposite: they want to buy bad paper from everyone, not just institutions in trouble, while taking no ownership....

Doing this without ownership is new ground. It's a choice mandated by executive branch ideology, not empirical reasoning.

You can't have it both ways. Either stay hands off and let the economy go where it will (to heck probably), or intervene and accept the scarlet stain of government ownership.

I've grown somewhat accustomed to the idea that our universe is far weirder than my brain can comprehend. Even so, this "dark flow" idea is pushing the envelope. For context, the In Our Time Multiverse program spent quite a bit of time talking about how no-one can imagine a way to test the nature of the universe beyond our event horizon.

I'm looking forward to commentary from my favorite physics bloggers. I assume it's a false alarm of some sort ...

... Patches of matter in the universe seem to be moving at very high speeds and in a uniform direction that can't be explained by any of the known gravitational forces in the observable universe. Astronomers are calling the phenomenon "dark flow."

The stuff that's pulling this matter must be outside the observable universe, researchers conclude...

...Scientists discovered the flow by studying some of the largest structures in the cosmos: giant clusters of galaxies ... observing the interaction of the X-rays with the cosmic microwave background (CMB), which is leftover radiation from the Big Bang, scientists can study the movement of clusters.

The X-rays scatter photons in the CMB, shifting its temperature in an effect known as the kinematic Sunyaev-Zel'dovich (SZ) effect. This effect had not been observed as a result of galaxy clusters before, but a team of researchers led by Alexander Kashlinsky, an astrophysicist at NASA's Goddard Space Flight Center in Greenbelt, Md., found it when they studied a huge catalogue of 700 clusters, reaching out up to 6 billion light-years, or half the universe away. They compared this catalogue to the map of the CMB taken by NASA's Wilkinson Microwave Anisotropy Probe (WMAP) satellite.

They discovered that the clusters were moving nearly 2 million mph (3.2 million kph) toward a region in the sky between the constellations of Centaurus and Vela. This motion is different from the outward expansion of the universe (which is accelerated by the force called dark energy).

"We found a very significant velocity, and furthermore, this velocity does not decrease with distance, as far as we can measure," Kashlinsky told SPACE.com. "The matter in the observable universe just cannot produce the flow we measure."

The scientists deduced that whatever is driving the movements of the clusters must lie beyond the known universe.

A theory called inflation posits that the universe we see is just a small bubble of space-time that got rapidly expanded after the Big Bang. There could be other parts of the cosmos beyond this bubble that we cannot see.

In these regions, space-time might be very different, and likely doesn't contain stars and galaxies (which only formed because of the particular density pattern of mass in our bubble). It could include giant, massive structures much larger than anything in our own observable universe. These structures are what researchers suspect are tugging on the galaxy clusters, causing the dark flow.

"The structures responsible for this motion have been pushed so far away by inflation, I would guesstimate they may be hundreds of billions of light years away, that we cannot see even with the deepest telescopes because the light emitted there could not have reached us in the age of the universe," Kashlinsky said in a telephone interview. "Most likely to create such a coherent flow they would have to be some very strange structures, maybe some warped space time. But this is just pure speculation...

I suspect thse guys are jumping the gun by a fair bit, but looking forward to more commentary.

... A $700 billion bailout of a Bush-gutted economy by an already nearly bankrupt U.S. Treasury? Two trillion for a failed war in Iraq? Ten trillion in national debt and a $480 billion budget deficit (not counting the $700B for the bailout and it could be much more) and a record trade deficit, with all those numbers nearly double (if not far more) of what they were in 2001? Why, you'd almost think someone -- or maybe an entire administration, perhaps the most irresponsible in modern U.S. history -- was largely to blame. But they're not! Because they're just numbers...

We don't need to throw out patents and copyright entirely. We do need serious reform. I hope China will lead the way if the US and Europe cannot.

Reform begins with the phased elimination of process patents. They were a terrible error. In other domains patent lifetimes must be shortened. Overlapping patents consolidated. The cost of obtaining a patent increased.

We have enough problems without creating more through wrong headed law.

Tuesday, September 23, 2008

John Flintstone padded through his Sedona adobe abode, one of his seven luxury caves, grumbling.

“Cindy, where are my flag coveralls? Sarah’s going to be here any minute. We’re getting in the Dinomobile and off to Colorado again.”

“Consuela is washing them, you grumpy old man,” Cindy called. She was standing near the fire pit, trying on one of 400 potential inaugural outfits. “It’s in the spin cycle.”

He heard the club hitting the front door bam, bam, bam and stumbled off to answer it. “Keep your mini-skirt on, Sarah,” he yelled. “I was a POW, remember?”

He opened the door. Sarah stood there with her slingshot and club, panting, pointing proudly behind her. On the ground lay a dead moose, bleeding. “I brought you a present, Gramps,” she said.

“Sarah, how much moose do you think we can eat?”

“You have to be ready for end times, John. Hang it over the fire and smoke it.”

Consuela rushed forward with his flag coveralls. She stopped to gape at Sarah, who was wearing a mid-thigh-length skirt made of dinosaur hide, an Amazonian-style brassiere and a boa made of auk feathers....

... I gave up on the Economist this year. I signed up in residency; it was fabulous back then. Smart, cool, analytic. It weakened in the early 90s, then it took a sudden dive around 1996. Maybe it had something to do with the color photos....

The Economist I loved had turned into a pale imitation of the WSJ OpEd pages.

I still follow a few feeds -- Africa, Science, and the obituary. Mostly though, I don't think about my old friend.

So it was with a start that I realized that nobody I read mentions it any more. I'm not the only one to have forgotten them.

We're in the midst of the biggest financial event since 1930, and The Economist is irrelevant.

... I’ve been pointing out that the dictatorial powers Paulson has sought would accrue to the next Treasury secretary, who might well be Phil Gramm. I’ve been trying to come up with a liberal-leaning name who might seem equally horrifying to Republicans, and the only one I’ve come up with is … me.

... I need to ask you to support an urgent secret business relationship with a transfer of funds of great magnitude.

I am Ministry of the Treasury of the Republic of America. My country has had crisis that has caused the need for large transfer of funds of 800 billion dollars US. If you would assist me in this transfer, it would be most profitable to you.

I am working with Mr. Phil Gram, lobbyist for UBS, who will be my replacement as Ministry of the Treasury in January. As a Senator, you may know him as the leader of the American banking deregulation movement in the 1990s. This transactin is 100% safe.

This is a matter of great urgency. We need a blank check. ...

... After I receive that information, I will respond with detailed information about safeguards that will be used to protect the funds."

Brilliant. Unsigned, but I think by Brad DeLong.

Trust the Bush administration?

I'd sooner sign with a 419 scam. At least my money might find its way into an impoverished nation ...

Monday, September 22, 2008

So today isn't the first time that I've wondered about why humans don't have fur, and, more interestingly, why so few other mammals are furless (no other primates). I guessed it was related to sweating. Being hairless we can use evaporative cooling, being a running primate (the only one) with a big hot brain we need lots of cooling, having a big hot brain we're good at finding water.

Oh, and Vitamin D is easier to make.

There are lots of downsides to losing fur of course. Mosquitoes love us, even if lice don't. Fur is nice in cold weather. Skin must be black to prevent burning - that requires new proteins and evolutionary costs. (Primate skin is pale beneath the fur, so making skin black means expensive evolution is needed.)

The downsides must be severe, because most every mammal has stuck with fur. So it has to be something weird about us. Hence the brain, running, sweating thought.

These days, of course, I can research my wonderings -- esp since the NYT has liberated their archives.

I started with an article stuck in draft since last year. The "aquatic ape" hypothesis is that we lost our fur during an aquatic lifestyle phase. The theory has suffered from "new age" enthusiasms, but it got a boost a year ago (BBC Science) ...

The waste from shellfish dinners discarded in a South African cave is said to be the earliest evidence of humans living and thriving by the sea.

The material was found by scientists working in a sandstone opening at Pinnacle Point on the Cape.

Researchers tell the journal Nature the remains were buried in sediments that are 164,000 years old.

The exploitation of coastal resources is thought to have been key in allowing early humans to move across the globe....

... The team excavated from the cave the cooked remains of some 15 types of marine invertebrate, mainly brown mussels, as well as other animal bones.

The very earliest human species would have been restricted to a diet of plants, such as berries and tubers, and the meat of animals they could catch.

The expansion to shellfish is one of the last additions of a new class of food to the human diet before the introduction of domesticated livestock meat just a few thousand years ago, the researchers tell Nature...

Interesting, but 164,000 years ago is not that long. From another article I learned we've been furless for much longer than that ...

One of the most distinctive evolutionary changes as humans parted company from their fellow apes was their loss of body hair. But why and when human body hair disappeared, together with the matter of when people first started to wear clothes, are questions that have long lain beyond the reach of archaeology and paleontology.

Ingenious solutions to both issues have now been proposed, independently, by two research groups analyzing changes in DNA. The result [imply] ... we were naked for more than a million years before we started wearing clothes.

Dr. Alan R. Rogers, an evolutionary geneticist at the University of Utah, has figured out when humans lost their hair by an indirect method depending on the gene that determines skin color. Dr. Mark Stoneking of the Max Planck Institute for Evolutionary Anthropology in Leipzig, Germany, believes he has established when humans first wore clothes. His method too is indirect: it involves dating the evolution of the human body louse, which infests only clothes.

Meanwhile a third group of researchers, resurrecting a suggestion of Darwin, has come up with a novel explanation of why humans lost their body hair in the first place.

Mammals need body hair to keep warm, and lose it only for special evolutionary reasons. Whales and walruses shed their hair to improve speed in their new medium, the sea. Elephants and rhinoceroses have specially thick skins and are too bulky to lose much heat on cold nights. But why did humans, the only hairless primates, lose their body hair?

One theory holds that the hominid line went through a semi-aquatic phase -- witness the slight webbing on our hands. A better suggestion is that loss of body hair helped our distant ancestors keep cool when they first ventured beyond the forest's shade and across the hot African savannah. But loss of hair is not an unmixed blessing in regulating body temperature because the naked skin absorbs more energy in the heat of the day and loses more in the cold of the night.

Dr. Mark Pagel of the University of Reading in England and Dr. Walter Bodmer of the John Radcliffe Hospital in Oxford have proposed a different solution to the mystery and their idea, if true, goes far toward explaining contemporary attitudes about hirsuteness. Humans lost their body hair, they say, to free themselves of external parasites that infest fur -- blood-sucking lice, fleas and ticks and the diseases they spread...

... others could take more convincing. ''There are all kinds of notions as to the advantage of hair loss, but they are all just-so stories,'' said Dr. Ian Tattersall, a paleoanthropologist at the American Museum of Natural History in New York.

Causes aside, when did humans first lose their body hair? Dr. Rogers, of the University of Utah, saw a way to get a fix on the date after reading an article about a gene that helps determine skin color. The gene, called MC1R, specifies a protein that serves as a switch between the two kinds of pigment made by human cells. Eumelanin, which protects against the ultraviolet rays of the sun, is brown-black; pheomelanin, which is not protective, is a red-yellow color.

Three years ago Dr. Rosalind Harding of Oxford University and others made a worldwide study of the MC1R gene by extracting it from blood samples and analyzing the sequence of DNA units in the gene. They found that the protein made by the gene is invariant in African populations, but outside of Africa the gene, and its protein, tended to vary a lot.

Dr. Harding concluded that the gene was kept under tight constraint in Africa, presumably because any change in its protein increased vulnerability to the sun's ultraviolet light, and was fatal to its owner. But outside Africa, in northern Asia and Europe, the gene was free to accept mutations, the constant natural changes in DNA, and produced skin colors that were not dark.

Reading Dr. Harding's article recently as part of a different project, Dr. Rogers wondered why all Africans had acquired the same version of the gene. Chimpanzees, Dr. Harding had noted, have many different forms of the gene, as presumably did the common ancestor of chimps and people.

As soon as the ancestral human population in Africa started losing its fur, Dr. Rogers surmised, people would have needed dark skin as a protection against sunlight. Anyone who had a version of the MC1R gene that produced darker skin would have had a survival advantage, and in a few generations this version of the gene would have made a clean sweep through the population.

... Dr. Rogers and two colleagues, Dr. David Iltis and Dr. Stephen Wooding, calculate that the last sweep probably occurred 1.2 million years ago, when the human population consisted of a mere 14,000 breeding individuals. In other words, humans have been hairless at least since this time, and maybe for much longer...

... From 1.6 million years ago the world was in the grip of the Pleistocene ice age, which ended only 10,000 years ago. Even in Africa, nights could have been cold for fur-less primates. But Dr. Ropers noted that people lived without clothes until recently in chilly places like Tasmania and Tierra del Fuego.

Chimpanzees have pale skin and are born with pale faces that tan as they grow older. So the prototype hominid too probably had fair skin under dark hair, said Dr. Nina Jablonski, an expert on the evolution of skin color at the California Academy of Sciences. ''It was only later that we lost our hair and at the same time evolved an evenly dark pigmentation,'' she said.

... Humans have the distinction of being host to three different kinds: the head louse, the body louse and the pubic louse. The body louse, unlike all other kinds that infect mammals, clings to clothing, not hair. It presumably evolved from the head louse after humans lost their body hair and started wearing clothes.

Dr. Stoneking, together with Dr. Ralf Kittler and Dr. Manfred Kayser, report in today's issue of Current Biology that they compared the DNA of human head and body lice from around the world, as well as chimpanzee lice as a point of evolutionary comparison. From study of the DNA differences, they find that the human body louse indeed evolved from the louse, as expected, but that this event took place surprisingly recently, sometime between 42,000 and 72,000 years ago. Humans must have been wearing clothes at least since this time.

Modern humans left Africa about 50,000 years ago. Dr. Stoneking and his colleagues say the invention of clothing may have been a factor in the successful spread of humans around the world, especially in the cooler climates of the north...

So it ends up that the state of the art isn't that different from my uninformed musings. We really don't know why other mammals stuck with fur, and why that wasn't an option for us. I don't buy the tick explanation, if that were it other mammals would be nekkid.

Many people have noted that this past week was a bad time for John McCain to have published an article promising to deregulate the health insurance industry, "as we have done over the last decade in banking," given the collapse of the banking industry due in part to that deregulation.

... my immediate reaction to the flap was to sympathize with whatever poor schlub had actually cranked out the article in question, which appeared in Contingencies, the closely-followed journal of the American Academy of Actuaries. The article just before it in Contingencies's newest issue was "An Actuary Weighs the Proposals." I love the magazine business.

Two things are 100% certain about this article:

1) John McCain did not write it;2) Whoever did write it was just trying to get through the to-do deadline list for that day in the campaign office, and knew that the simplest way to do so was to cut-and-paste from existing statements on health policy.

I sympathized because on my very first day as a cub speechwriter in the Jimmy Carter campaign office, 26 years old and ready to inspire the nation, I was told that I had two hours to turn out an article "by" Carter for an important interest group...

Sniff. And we thought they really cared.

BTW, if you remember Carter's hunting rep, it came in part from Fallows cub assignment for a gun club rag ...

... in March, and again this week, interest rates on T-bills fell close to zero — liquidity trap territory. What does that do to the Fed’s role?

You still see people saying, in effect, “never mind the zero interest rate, why not just print more money?” Actually, the Bank of Japan tried that, under the name “quantitative easing;” basically, the money just piled up in bank vaults. To see why, think of it this way: once T-bills have a near-zero interest rate, cash becomes a competitive store of value, even if it doesn’t have any other advantages...

... Ben Bernanke came into his current position believing that central banks have the power, all on their own, to fight Japan-type problems. It seems that he was wrong

So when you're turning Japanese (apologies to those in Japan who suffered this road in the 80s and 90s), you need more than the Fed. You need policy. That means you need a President.

That means that there's no real hope until next January, then we either flame out with McCain/Palin or hope with Obama/Biden.

Oh well, we knew that the last election was one of the most important in American history. We blew it anyway. So now we the next one is one of the most important in American history ...

PS. Krugman's blog is being overwhelmed by comments, most of them are denial-of-service insults from the enemies of the enlightenment. We need to tell him that others have solved this problem by outsourcing the moderation task to trusted third parties. Of course he doesn't control his blog, the NYT does ...

... a McCain commercial last month mimicked the words and imagery of the best-selling Christian “Left Behind” book series in ways that would have set off alarm bells among evangelicals nervous about the Antichrist.

Mr. McCain himself is not popular with evangelicals. But they will vote for him if they think the other guy may be on Satan’s side.

In fact, of course, Mr. Obama took his oath on the Bible, not — as the rumors have it — on the Koran. He is far more active in church than John McCain is.

(Just imagine for a moment if it were the black candidate in this election, rather than the white candidate, who was born in Central America, was an indifferent churchgoer, had graduated near the bottom of his university class, had dumped his first wife, had regularly displayed an explosive and profane temper, and had referred to the Pakistani-Iraqi border ...)

What is happening, I think, is this: religious prejudice is becoming a proxy for racial prejudice. In public at least, it’s not acceptable to express reservations about a candidate’s skin color, so discomfort about race is sublimated into concerns about whether Mr. Obama is sufficiently Christian.

The result is this campaign to “otherize” Mr. Obama. Nobody needs to point out that he is black, but there’s a persistent effort to exaggerate other differences, to de-Americanize him...

... I’m writing in part out of a sense of personal responsibility. Those who suggest that Mr. Obama is a Muslim — as if that in itself were wrong — regularly cite my own columns, especially an interview last year in which I asked him about Islam and his boyhood in Indonesia. In that interview, Mr. Obama praised the Arabic call to prayer as “one of the prettiest sounds on earth at sunset,” and he repeated the opening of it.

This should surprise no one: the call to prayer blasts from mosque loudspeakers five times a day, and Mr. Obama would have had to have been deaf not to learn the words as a child. But critics, like Jerome Corsi, whose book denouncing Mr. Obama, “The Obama Nation,” is No. 2 on the New York Times best-seller list, quote from that column to argue that Mr. Obama has mysterious ties to Islam. I feel a particular obligation not to let my own writing be twisted so as to inflame bigotry and xenophobia.

Journalists need to do more than call the play-by-play this election cycle. We also need to blow the whistle on such egregious fouls calculated to undermine the political process and magnify the ugliest prejudices that our nation has done so much to overcome.

Well, at least Obama isn't being accused of atheism. That would be really serious. Being the anti-Christ ain't so bad.

There are only two interesting aspects to the late-to-the-game Kristof column. One is that he's right that the religious ploy is a great proxy for racial prejudice. My opinion of the religious right can't really get any lower though; their enthusiasm for torture in the name of the Savior Bush pretty much dropped 'em into my eternal pit of fire.

The more important point is his belated call that journalists need to stop the play-by-play and start calling foul. Too little, probably too late, but it's progress of a sort. It moves Kristof a good step above the Friedman/Dowd basement.

Sen. John McCain’s top campaign aides convened a conference call today to complain of being called “liars.” They pressed the media to scrutinize specific elements of Sen. Barack Obama’s record.

But the call was so rife with simple, often inexplicable misstatements of fact that it may have had the opposite effect: to deepen the perception, dangerous to McCain, that he and his aides have little regard for factual accuracy...

.... Page 158: Addington didn't like the idea that the speaker of the House and the president pro tempore of the Senate are included in the order of succession. An unnamed Cheney admirer told Gellman that the vice president and his staff had 'plans' for an alternate succession, 'and their plans were going to be by fiat.'

... All those without a car or a ride were taken on state buses to four state-run warehouses. It was in these shelters, including two abandoned stores, a Wal-Mart and a Sam’s Club, that thousands of working-poor New Orleanians got a sickening reminder of Katrina.

Evacuees said they had had no idea where they were going; bus drivers would not tell them. When they arrived, there were not enough portable toilets, and no showers. For five days there was no way to bathe, except with bottled water in filthy outdoor toilets. Privacy in the vast open space — 1,000 people to a warehouse, shoulder-to-shoulder on cots — was nonexistent. The mood among evacuees was grim, surrounded as they were by police officers and the National Guard, with no visitors or reporters allowed...

It's almost as though someone was taking revenge for past complaints ...

The precise moment of McCain's abasement came, would you believe, not at some news conference or on one of the Sunday shows but on "The View," the daytime TV show created by Barbara Walters. Last week, one of the co-hosts, Joy Behar, took McCain to task for some of the ads his campaign has been running. One deliberately mischaracterized what Barack Obama had said about putting lipstick on a pig -- an Americanism that McCain himself has used. The other asserted that Obama supported teaching sex education to kindergarteners.ad_icon

"We know that those two ads are untrue," Behar said. "They are lies."

Freeze. Close in on McCain. This was the moment. He has largely been avoiding the press. The Straight Talk Express is now just a brand, an ad slogan like "Home Cooking" or "We Will Not Be Undersold." Until then, it was possible for McCain to say that he had not really known about the ads, that the formulation "I approve this message" was just boilerplate. But he didn't.

"Actually, they are not lies," he said.

Actually, they are.

McCain has turned ugly. His dishonesty would be unacceptable in any politician, but McCain has always set his own bar higher than most...

I am one of the journalists accused over the years of being in the tank for McCain. Guilty. ...

... What impressed me most about McCain was the effect he had on his audiences, particularly young people. When he talked about service to a cause greater than oneself, he struck a chord. He expressed his message in words, but he packaged it in the McCain story -- that man, beaten to a pulp, who chose honor over freedom. This had nothing to do with access. It had to do with integrity.

McCain has soiled all that. His opportunistic and irresponsible choice of Sarah Palin as his political heir -- the person in whose hands he would leave the country -- is a form of personal treason, a betrayal of all he once stood for. Palin, no matter what her other attributes, is shockingly unprepared to become president. McCain knows that. He means to win, which is all right; he means to win at all costs, which is not.

At a forum last week at Columbia University, McCain said, "But right now we have to restore trust and confidence in government." This was always the promise of John McCain, the single best reason to vote for him. America has been cheated on too many times -- the lies of Vietnam and Watergate and Iraq. So many lies. Who believes that in Afghanistan last month, only five civilians were killed by the American military in an airstrike, instead of the approximately 90 claimed by the Afghan government? Not me. I first gave up on the military during Vietnam and then again when it covered up the death of Pat Tillman, the Army Ranger and former NFL player who was killed in 2004 by friendly fire.

McCain was going to fix all that. He was going to look the American people in the eyes and say, not me. I will not lie to you. I am John McCain, son and grandson of admirals. I tell the truth.